Joining the euro area is a continuation of Estonia’s integration with the European Union, which will guarantee a more stable economy in the future. Being a member of the Eurosystem will lower our country-specific risks, which will in turn boost the reliability of our economy. If we continue to follow a balanced economic policy, joining a stable economic region will increase Estonia’s long-term monetary stability, which will be reflected in stable and low interest rates. Adopting the euro will lead to a fall in transaction costs, mainly currency exchange costs, and make price comparisons easier, which will in turn support price stability. The introduction of the euro will also increase Estonia’s role in the economic policy of the European Union.

Under Article 122 (2) of the Treaty establishing the European Community, the Council (usually composed of ministers of financial and economic affairs, including the Estonian minister) can vote with a qualified majority (2/3) to decide abrogation of derogation, thus granting membership of the euro area. The European Commission makes the proposal for this decision. The proposal is appended with reports from the Commission and the European Central Bank, an opinion from the European Parliament, and the result of the discussions of the heads of state or government in the European Council.

For abrogation of the derogation to happen, the state’s legal framework has to be in conformity with the Statutes of the European System of Central Banks and the European Central Bank. The state also has to meet the Maastricht criteria. Conformity with the criteria is assessed every two years or at the state’s request. When the decision to abrogate a derogation has been taken, the Council of the European Union, acting by unanimity with no objections, sets the final exchange rate under Article 123 (5). The Commission makes the proposal and the ECB opinion is added to it. Ministers of financial affairs of the euro area and of the candidate state take part in voting in the Council of the European Union.

A special regulation has been adopted concerning documents of unlimited term which prove advance payment: i) all institutions of the public sector are obliged to inform the general public a minimum of three months before the launch of the euro of the terms of validity and conditions of use of tickets and other documents after the changeover to the euro; ii) the minimum period of validity for postage stamps will be at least three years from the launch of the euro; iii) tickets for local public transport in kroons will be valid for a minimum of three months after €-day. Documents proving advance payments which display a term of validity will be valid for the indicated term.

The obligation to display the prices of goods and services in both kroons and euros is given in a regulation of the Minister of Economic Affairs and Communications. It is planned that this would include a period of six months before and after the changeover to the euro. The obligation also extends to the display of prices of goods and services at points of sale where the communication of price information is possible in printed or written form. This means that consumers will get the dual display of prices in all shops and points of sale selling basic commodities where customers most often make their daily purchases. Until then, the dual display of prices will remain recommended. Everyone doing this voluntarily must use the official exchange rate of Eesti Pank of 1 EUR = 15.6466 EEK.

The rules for rounding and recalculating prices have been laid down by a regulation of the Ministry of Economic Affairs and Communications. Rounding must be done with the accuracy of at least one euro cent. The Ministry of Economic Affairs and Communications has produced guidelines for the dual display of prices. Price changes will be monitored before and after the changeover to the euro and the public will be informed through the press. Voluntary consumer protection associations, the Consumer Protection Board, and the Estonian Institute of Economic Research are involved in the price monitoring process. Price comparisons include the most frequently consumed food products, basic commodities and the most popular services.

The best offer in the international competition held in 2005 to mint the Estonian euro coins was made by the Mint of Finland. The first euro banknotes were acquired through the European System of Central Banks (ESCB).

The experience of the euro area indicates that the introduction of the euro will not lead to a major price hike. The effects of the changeover have remained short-lived and in the range of 0.1–0.3%. Estonia has taken several steps to reduce the price rise pressures. The government has published specific rules for the recalculation of prices and retailers will be obliged to publish the prices of goods in euros as well as kroons well before the adoption of the euro. The aim is to give people time to get used to the euro as a currency and avoid the misunderstandings that may occur due to changes in the numerical values of the prices. In order to avoid additional inflationary prices, the government has set a policy of rounding the sums for state taxes, payments and fees to the closest full euro that is the most favourable to taxpayers or recipients of state benefits. In addition, the price level will be regularly monitored before and after the changeover and the resulting price comparisons will be made public. Monitoring of the price levels aims to inform the public of the price changes and discipline businesses.

The adoption of the euro will not affect foreign-currency deposits with banks. Kroon deposits will be converted into euros, because the kroon will be replaced by the euro. There is no purpose or point in converting foreign-currency deposits, because these currencies will still be valid after the changeover to the euro.